The financial times they are a changing. And we’re not talking about the newspaper here. No, what we’re referring to is the market for financing and, specifically, rating agencies.

In November of last year, rising US credit score company Credit Karma bought London-based Noddle, adding it to their already enormous catalogue of take-overs. Transunion itself had introduced the rating app in 2011 to breathe fresh air into the rating business.

Which it did. So why was Credit Karma happy to pay so much money for it? Let’s take a closer look at Noddle and why it could matter to your car purchase, too.

What is Noddle and why is it so valuable?

Noddle is one of the UK’s leading credit rating apps. Granted, it is not the biggest. That honour goes to Clear Score, which has a whopping 6 million users compared to Noddle’s 4 million.

Nevertheless, Noddle is a big player and a crown jewel in every credit rating’s portfolio.

What made Noddle so unique when it was introduced? The fact that it allowed you to check your rating on your mobile phone, turning credit rating into a far more dynamic process. Even more importantly, it was entirely for free.

This was great news for many UK households. So far, you had to pay a lot of hard-earned cash just to find out your score. Now, you could do it whenever you wanted to, wherever you wanted to – and at no additional cost.

What your credit score says about you

You might ask yourself why this matters so much. And indeed, some experts claim that credit scores are vastly over rated.

For most of us, however, our credit score is the entry gate to the world of credit and financing. Without a favourable score, you can all but forget about getting a decent car or taking out a mortgage on a house.

Credit scores tell potential lenders how reliable and trustworthy you are as a customer. If that number indicates you might constitute a risk, they may be reluctant to lend you any money at all. The better your rating, the better your chances of success.

With an app like Noddle, you have instant access to your score at all times. This can be a great help if you want to apply for a loan. And you can even work on improving your score by taking appropriate measures and then checking the app regularly to see if they are working.

Which credit agencies are best?

Obviously, Noddle isn’t the only credit rating tool out there. As we mentioned, it isn’t even the only mobile rating app. Devised as a part of TransUnion, it doesn’t actually calculate its own scores, but depends on a parent company to feed it with that information.

So is Noddle the best credit rating tool out there?

As always, it depends.

There are 17 (seventeen!) different credit reports available in the UK. You will not be able to use all of them. Nor do you need to. Among these 17, three stand out as major rating agencies. They are used by the large majority of lenders in this country. By using one of them, you are almost certain to be on the safe side.

So which are the big three credit rating agencies?

The three biggest rating agencies in the UK are

• Experian
• Equifax
• CallCredit / TransUnion

Of these three, Experian reportedly has the largest user base: 76% of lenders in the UK are using it. In comparison, a still strong 54% are using Equifax. TransUnion currently only has a user base of 30%.

So, in case of doubt, is it safest to just go with Experian? Curiously, things are not quite that easy.

For an even deeper look at this topic, check out our guide of the most important credit rating agencies!

Exceptions to the rule

For one, you first need to make sure you’re selecting the credit rating agency that’s right for you. As Debtcamel points out:

“Catalogues often use Equifax. Payday lenders and other bad credit specialists often use Call Credit.”

In some cases, it may even be advisable to use all three major CRAs. These cases include the following:

• If you believe you have been wrongly rejected for a loan. By checking all four major credit rating agencies, you can verify if your rating is indeed bad or if there’s been a mistake.
• If you are planning to apply for a big credit soon. You really wouldn’t want to get rejected if the lenders happens to use the one CRA where you have a bad score.

So how does Noddle fit into all of this?

Noddle does not reinvent the rating system. What it does do is make credit rating mobile and free.

And, in a sense, that is quite significant after all.

In the past, you would check your credit rating perhaps once or twice a year. Today, you can check it at your disposal. This has entirely freed up the static idea of credit ratings and of being at the mercy of rating agenices. You can devise financial strategies and test their efficacy by regularly testing it against the changes in your credit rating.

Especially if you’ve taken a financial hit in the past, Noddle can be a great tool to get back on track again.

Will it help to optimise your Noddle score?

You might ask: If Noddle is only a free mobile app, does it even make sense to optimise your Noddle score?

The simple answer to that is that Noddle belongs to Credit Karma now and as such, is part of a huge credit rating agency used by thousands of lenders worldwide. Granted, its foothold in the UK is not quite as strong as it used to be with TransUnion. But Credit Karma is one of the rising tigers on the scene and could well soon come to eclipse many of its rivals.

So, yes, Noddle is one of the most important scores to optimise. It may not be able to work miracles. But it can definitely make a difference.